Quantities 2012 2013 Apples 60 160 Oranges 80 220

Name: Problem 19, Chapter 21: Economics
Uploaded: 2020-11-11T22:26:29-08:00
Duration: 7 min 46 s
Channel: Heather Duong
Description: Quantities 2012 2013 Apples 60 160 Oranges 80 220 Prices 2012 2013 Apples 0.50 1.00 Oranges 0.25 2.00 Calculate real GDP in 2012 and 2013 expressed in base-year prices.

step 1 Question 19. Question 19 asked you to calculate the real GDP in 2012 and 2013. There are two goo

Question

$$\begin{array}{lcc} \text { Quantities } & 2012 & 2013 \\ \hline \text { Apples } & 60 & 160 \\ \text { Oranges } & 80 & 220 \\ \text { Prices } & 2012 & 2013 \\ \hline \text { Apples } & \$ 0.50 & \$ 1.00 \\ \text { Oranges } & \$ 0.25 & \$ 2.00 \end{array}$$ Calculate real GDP in 2012 and 2013 expressed in base-year prices.

   $$\begin{array}{lcc}
\text { Quantities } & 2012 & 2013 \\
\hline \text { Apples } & 60 & 160 \\
\text { Oranges } & 80 & 220 \\
\text { Prices } & 2012 & 2013 \\
\hline \text { Apples } & \$ 0.50 & \$ 1.00 \\
\text { Oranges } & \$ 0.25 & \$ 2.00
\end{array}$$
Calculate real GDP in 2012 and 2013 expressed in base-year prices.

Economics

Michael Parkin 12th Edition

Chapter 21, Problem 19

Instant Answer

Solved by Expert Heather Duong

11/11/2020

Step 1

In this case, the base year is 2012. Show more…

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$$\begin{array}{lcc} \text { Quantities } & 2012 & 2013 \\ \hline \text { Apples } & 60 & 160 \\ \text { Oranges } & 80 & 220 \\ \text { Prices } & 2012 & 2013 \\ \hline \text { Apples } & \$ 0.50 & \$ 1.00 \\ \text { Oranges } & \$ 0.25 & \$ 2.00 \end{array}$$ Calculate real GDP in 2012 and 2013 expressed in base-year prices.

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Key Concepts

Base-Year Prices

Base-year prices are the fixed prices from a specific reference year used to calculate real GDP. By using these constant prices, economists can isolate changes in the quantity of goods and services produced over time, making it possible to distinguish real growth from inflationary effects.

Real GDP

Real GDP is the inflation-adjusted measure of a country’s economic output. It is calculated by valuing goods and services produced in each period at constant prices, typically using the prices from a base year. This adjustment allows for the comparison of economic output across different years without the distortion caused by changing price levels.

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